Merkel: Europe in one of its toughest hours

German chancellor says European Union must be strengthened, not weakened if economic crisis is to be solved.

14 Nov 2011 23:10 GMT

German Chancellor Angela Merkel has called for a stronger political union in Europe as a solution to a deepening euro zone debt crisis, adding that the region was facing its toughest times since the first world war.

In an hour-long address to thousands of delegates from her Christian Democrats (CDU) party on Monday, Merkel urged party members to set aside misgivings about the euro and accept political integration.

"Europe is in one of its toughest, perhaps the toughest hour since World War Two," Merkel, speaking at her party's conference in the German city of Leipzig, said. She said she feared Europe would fail if the euro failed and vowed to do anything to stop this from happening.

She offered little by way of solutions for resolving the crisis that has forced bailouts of Greece, Ireland and Portugal, and stirred doubts about the survival of the 13-year-old currency area.

But she said the European Union should consider measures to force countries in violation of fiscal discipline rules to face tough and automatic sanctions, even possibly hauling them to the European Court of Justice.

"We must develop the European Union's structure further. That does not mean less Europe, but more. That means creating a Europe that ensures that the euro has a future. Our generation's duty now is to finalise the economic and currency union to form, step by step, a political union."

She added that Germany, which as Europe's largest economy has provided the biggest share of the aid to stricken euro states, would have to make more sacrifices in the months ahead.

Al Jazeera's Nick Spicer, reporting from Berlin, said Merkel had been trying to link the destinies of Europe and Germany.

He said Merkel also tried to justify to the party faithful the policies she had been implementing the past two years, in that the creation of the European Financial Instability fund was necessary if the euro was to survive.

Debt dominating headlines

The two-day party meeting was originally supposed to focus on education policy, but Europe's debt crisis has dominated headlines for months and thrust itself into the centre of the debate.

Over the past week alone, the leaders of Greece and Italy were forced out and replaced with technocratic governments charged with pushing through tough austerity measures.

Merkel does not face an election until 2013, but knows that she too could become a victim of the euro zone turmoil if she makes the wrong move.

"If the euro fails, then Merkel will fail. That's pretty clear," said Juergen Dierks, a 57-year old CDU delegate from Lower Saxony who described her speech as solid.

Asked about Merkel's demand that the party accept "more Europe", he answered: "We all know there is no other choice."

Voluntary euro exit

Under former Chancellor Helmut Kohl, the CDU led Germany into the euro.

Nearly 13 years on, many German conservatives are uneasy with taxpayer-funded bailouts of weak euro states, resentful of fiscal backsliding in countries like Greece and concerned the crisis is impinging on the independence of the European Central Bank, which has been forced to buy up bonds of stricken states.

Some in the party believe the whole project was a mistake that must now be carefully undone, with Greece and possibly other countries exiting the bloc.

A resolution put forward by the party leadership in the run-up to the Leipzig congress states explicitly that countries that repeatedly violate Europe's fiscal rules should be allowed to leave voluntarily.

But Merkel argued that Germany had a responsibility towards its partners and was vulnerable itself if other euro zone states were allowed to collapse, noting that 60 per cent of German exports go to the European Union.

Any talk of leaving the euro zone "would be like opening a Pandora's box," Al Jazeera's Spicer said.

"When Greece's Papandreou had initially suggested a referendum, it openly angered Germany and France who called him to Cannes to reprimand him for that move. Germany and France came out after that saying they would come out and defend an euro in its present form - all 17 members - as anything else that would just be a red flag to a bull, as far as the markets are concerned.